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[2013] ZAGPPHC 26
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Thunzi Consulting (Pty) Ltd v City of Tshwane and Others (16558/2011) [2013] ZAGPPHC 26 (6 February 2013)
NOT
REPORTABLE
IN
THE COURT OF THE REPUBLIC OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
Case
No.: 16558/2011
DATE:05/02/2013
In
the matter between:
THUNZI
CONSULTING (PTY)
LIMITED
…...............................................
Applicant
CITY
OF
TSHWANE
....................................................................................
1st
Respondent
DEPART
MENT OF PUBLIC WORKS AND
INFRASTRUCTURE
DEVELOPMENT
…..............................................
2nd
Respondent
ESKOM
HOLDINGS (PTY)
LTD
...............................................................
3rd
Respondent
JUDGMENT
MNGQIBISA-THUSIJ:
[1]
The applicant instituted proceedings in which it sought the following
relief against the respondents:
1.1
a final interdict restraining the respondents from putting the
implementation of the second phase of the Winterveldt project
for the
installation of solar water heaters in RDP houses on tender;
1.2
an order directing the first and third respondents to allow the
applicant to proceed with the implementation of the second phase
in
terms of an agreement between the applicant and the first respondent;
and
1.3
costs on an attorney and own client scale.
[2]
At the hearing of this matter the applicant withdrew the application
after it conceded that the relief sought in its notice
of motion was
academic in view of the fact that the tender for the implementation
of the second phase was already granted and implementation
of the
second phase was near completion. It was apparent to the applicant
that the relief sought might not be granted.
[3]
The only issue remaining for determination is the costs.
[4]
The general rule is that a successful litigant is entitled to his or
her costs. The withdrawal of the application against the
respondents
renders the applicant liable for the costs of this application. It is
incumbent upon the applicant to show that even
though it had
abandoned its claim and was therefore liable for the cost, that if
the application had proceeded, it would have succeeded
in its
application for a final interdict against the respondents.
[5]
The applicant would have had to show that:
5.1
it has a clear right;
5.2
there is interference with its right; and
5.3
there is no alternative remedy available.
[6]
In 2005 the applicant submitted a proposal to the first respondent
for the installation of solar water heaters (“heaters”)
in RDP houses in the Winterveldt area. As a result, during 2007 the
first respondent commissioned the applicant to design, specify
and
manage the implementation of a pilot project for the installation of
heaters in 20 households in the Winterveldt area. Thereafter
in a
letter titled “letter of Intent” dated 28 April 2009, the
first respondent mandated the applicant to collect data
for an
investigation into the potential of electricity costs savings in the
area. Further, the first respondent indicated that
it would recommend
the applicant to the third respondent for appointment in the
implementation of its results should they be feasible.
The first
respondent indicated, however, that such recommendation would be
subject to all conditions and restraints imposed by
the third
respondent, as well as the first respondent’s operational and
financial requirements.
[7]
As a result of the applicant’s recommendation, the first
respondent’s Council approved the installation of heaters
in 3
000 households in the Winterveldt area. The project was to be
implemented in two phases. As a result the third respondent
entered
into an agreement with the applicant in terms of which the applicant
was authorised to implement the first phase of the
installation of
the heaters in 270 households at a cost of R8.4 million.
[8]
After completion of the first phase, the first respondent put the
second phase on tender. The second phase consisted of 2 730
houses in
which the heaters would be installed at a cost of R27.9 million. The
applicant wrote various letters to the first and
third respondent in
which it objected to the second phase being put on tender. The
applicant received no response from the first
respondent. The third
respondent invited the applicant to tender for the implementation of
the second phase. Instead of submitting
an application, the applicant
instituted these proceedings in which it sought in the main to stop
the first and third respondents
from proceeding with the tender. In
the meantime, the tender for the second phase was awarded and the
implementation of the second
phase was completed on or about 27 May
2011.
[9]
The applicant based the relief sought on a letter written to it by
the first respondent in which the applicant was commissioned
to
implement the first phase. This letter dated 29 May 2009 reads in
part as follows:
“
The
Energy and Electricity Division (EED) of the City of Tsbwane (CoT)
hereby gives permission to Messrs Thunzi Consulting to install
the
3,000 solar water heater units in the RDP houses in Winterveldt as
part of the investigation which was undertaken by Messrs
Thunzi
Consulting under contract Q49/2007. We hereby refer to the initial
letter of intent dated 13/09/2007 in which it was mutually
agreed
that Messrs Thunzi will fist present a proposal and feasibility
report to the efficiency project to EED. The EED further
committed
that should the assessment prove to result in information that can be
structured into a formal EEDSM project subject
to all the conditions
and constraints imposed by Eskom DSM as well as the EED operational
and financial requirement then Messrs
Thunzi will be given an
exclusive right to formalise a contractual DSM agreement with EED and
ESKOM DSM which is confined to the
3,000 DP houses in Winteveldt.”
[10]
In its papers the applicant contended that, based on the passage
quoted in paragraph 5 above, it had concluded an agreement
with the
first respondent in terms of which the applicant would install all
3000 heaters making up the project.
[11]
It was submitted on behalf of the applicant that the respondents
should be liable for the costs of the application as it was
forced to
seek a final interdict against the first and third respondents since
the respondents, contrary to an agreement concluded
between it and
the first respondent, had prevented it from implementing the second
phase of the project. In this regard the applicant
is relying on a
letter written by the first respondent to the applicant dated 29 May
2009. Further, it was contended on behalf
of the applicant that the
applicant was entitled to seek a final interdict against the third
respondent as the third respondent
by putting the implementation of
the second phase to tender, was interfering with an existing
contractual relationship between
the applicant and the first
respondent. In the alternative, the applicant prayed for an order in
terms of which each party would
pay its own costs.
[12]
The submissions made on behalf of the respondents were the following.
It was submitted on behalf of the respondents that the
applicant
should pay the costs of the withdrawn application on an attorney and
client scale in that it should not have brought
the application in
the first place as the applicant was never contracted to implement
the second phase of the project but only
the first phase. Secondly
that at the time the applicant instituted the proceedings the second
phase of the project had already
gone on
tender.
On behalf of the first respondent it was further contended that the
applicant adopted a wrong procedure and should have
instead applied
for the review of the first and third respondents’ decision to
put the implementation of the second phase
on tender. Furthermore, it
was contended that an alternative route the applicant should have
followed would have been to apply
for an interim interdict, pending
the institution of review proceedings of the respondents’
decision.
[13]
The withdrawal of the application against the respondents renders the
applicant liable for the costs of this application. It
was upon the
applicant to show that had it proceeded with the matter, barring the
fact that the implementation of the second phase
of the project had
been completed, it would have succeeded in its application for a
final interdict against the respondents. The
applicant would have had
to show that it had a clear right in that there was an existing
contract between itself and the first
respondent for the
implementation of the second phase. From the papers filed, I am of
the view that the applicant would not have
succeeded on this ground
in that, as correctly pointed out by counsel for the respondents,
looking at the correspondence between
the applicant and the first
respondent and on which the applicant relies for its clear right, it
is apparent that although the
applicant would have been the first
respondent’s preferred service provider, this intent was
subject to any conditions and
constraints imposed by the third
respondent and also the first respondent’s operational
requirements. If the contract had
been awarded to the applicant
without tender, and taking into account the value of the contract,
the first respondent would have
flouted the regulations governing the
awarding of contracts of such magnitude. Furthermore, before
implementation of the second
phase it would have been necessary, in
spite of the undertaking made by the first respondent that a contract
should be entered
into between the applicant and the third respondent
as was done with the first phase of the project. Nothing turns on the
fact
that the relevant regulations had already been flouted when the
applicant was awarded the contract to implement the first phase
of
the project.
[14]
Assuming that there was a contract existing between the applicant and
the first respondent, on the implementation of second
phase to put
out on tender, the applicant had an alternative remedy. The applicant
could have instituted an action for damages
based on the assumed
contract. Once a decision has been implemented, the courts are
reluctant to make an order stopping such implementation
particularly
where huge costs have been incurred in the implementation of the
decision and where innocent third parties have acquired
rights on the
basis of the decision. It is common cause that when the application
was launched, the implementation of the second
phase for the
installation of the heaters was nearing completion. There is a
possibility that the court would have been reluctant
to undo all what
has been done bearing in mind the consequent inconvenience to the
beneficiaries of the project, even if, had the
merits been dealt with
and the applicant was successful. Since the value of the second phase
was known, the applicant would not
have had difficulties quantifying
its damages.
[15]
On the above bases, I am of the view that the applicant should bear
the costs of this application. However, with regard to
the first
respondent, taking into consideration that the first phase of the
contract had been concluded in contravention of the
procurement
policy of the first respondent and therefore there was an expectation
on the part of the applicant that a contract
for the second phase
would have been concluded on the same basis as the contract for the
first phase, I am of the view that the
first respondent should have
engaged with the applicant when it became apparent that the
implementation of the second phase would
have to comply with the
relevant procurement policies of the first respondent. Ignoring
correspondence from the applicant about
the matter was not helpful.
This matter could possibly have been sorted out if the first
respondent had responded to the applicant’s
correspondence. On
that basis I am not convinced that it would be fair and just for the
first respondent to be awarded costs on
an attorney and client scale
even though it is considered to be a successful party.
[16]
As correctly pointed out by counsel for the third respondent, there
was no need to cite the third respondent as, by the applicant’s
own admission, it had purportedly concluded a contract with the first
respondent and not the third respondent. The third respondent
did
invite the applicant to tender for the contract, which invitation was
not taken. The third respondent should not have been
put to the cost
of defending the application. I am therefore of the view that the
third respondent is entitled to costs on an attorney
and client
scale.
[17]
This matter was set-down for hearing on 27 October 2011 but was
removed from the roll and costs were reserved. On 20 February
2012
the matter was again removed from the roll and costs reserved due to
the fact that the court file was not properly indexed
and paginated
by the applicant.
[18]
In the premises the following order is made:
1.
The applicant is liable for the wasted costs occasioned by the
postponement of 27 October 2011 and 20 February 2032.
2.
The applicant is liable to pay the party to party costs of the first
respondent.
3.
The applicant is liable to pay the third respondent’s costs on
an attorney and client basis.
N P MNGQIBISA-THUSI
Judge
of the High Court